Forex Signal (Fri, August 27 2010, 4:30am NY Time EDT) - UK Revised GDP q/q

Henry Liu

Former FPA Special Consultant
Revised GDP q/q, or better known as the 2nd quarterly GDP release, is going to be the focus today. Here is the forecast:

4:30am (NY Time) UK Revised GDP q/q Forecast 1.1% Previous 1.1%

The Trade Plan
Since this is the second release of the 2nd quarter GDP, we’re not likely to get a huge surprise as most 2nd releases are pretty much inline. However, judging from the expected release of 1.1% and previous release of 1.1% (Prelim GDP on July 26th), we may not get a surprise release after all.

However, we'll still be looking to trade the release using our after news retracement method. Our surprise factor is 0.3% as we’ll look to possibly SELL GBP/USD at 0.8% or worse, and BUY GBP/USD at 1.4% or better. Historically, there is a 80% of chance if our S. Factor is hit, the market will move up to 50~70 pips within the hour as GDP is a very high impact report.

For more information on my news trading methods:
Henry's news trading methods

The Market
After recent scare by BOE member Weale during an interview for "significant risk of double-dip recession" market has been pretty indecisive when it comes to Sterling. Today's release may help to push GBP to a new level, if we get a strong deviation from the forecast. As stated before, the 2nd Quarter GDP release out of UK may be the highest release for some time, and a positive revision upwards could push GBP above the 1.5700 level...

Additional Thoughts
With the general market being driven by risk aversion, it is best to follow the trend and SELL GBP in the event that we get a strong release... it may not be the best time to SELL during European session, but GBP should retreat from its highs and provide a great entry at the top during NY session.

Pre-news Consideration
There is no pre-news consideration for this release today.

Revised GDP q/q from UK, is defined as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP is the basically direct measurement of the economy, and a stronger GDP means that the central bank will more likely raise interest rate as better economy usually brings higher inflationary pressure…

Historical Chart & Data for UK Revised GDP


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Thanks Henry, though some people say we are your worshiper. I don't blame them. I know "It is better to worship a man who does well than to be a friend to a man who offers nothing". I look forward to a good and profitable trade today. thanks once again.